TLDR
- Piper Sandler launched Shopify coverage with an Overweight rating and set a $165 price objective
- SHOP was designated the firm’s premier selection within the Web Builders category
- The investment bank forecasts 28% revenue expansion in 2027, surpassing consensus expectations of 24%
- Shop Pay and Shopify POS are positioned to capture more than $50 trillion in untapped worldwide GDP
- Fourth quarter gross merchandise value surged 31% compared to last year, while Q1 revenue growth guidance exceeded 30%
Piper Sandler has designated Shopify (SHOP) as its leading choice within the Web Builders category, launching coverage with an Overweight rating alongside a $165 price objective.
The investment firm positions Shopify as fundamental infrastructure powering worldwide commerce operations. While acknowledging the stock’s premium valuation metrics, Piper Sandler maintains the risk-reward equation remains favorable.
Their bullish thesis stands on three foundational elements. First is cohort performance analysis. Piper Sandler’s data indicates Year-1 cohort metrics are performing significantly better than COVID-period benchmarks, suggesting potential upside beyond current Wall Street projections.
Second comes the payments opportunity. The firm calculates that Shop Pay and Shopify POS can address more than $50 trillion in untapped global GDP, with deployment still in nascent phases.
Third is the enterprise segment. According to Piper Sandler’s web platform monitoring, approximately 80% of leading e-commerce websites remain custom-developed or operate outside major platforms — representing substantial market share potential for Shopify.
The firm anticipates 28% year-over-year revenue expansion in 2027, exceeding the Street’s 24% consensus forecast.
Valuation Check
Regarding valuation metrics, SHOP currently trades at roughly 9x projected 2027 revenues and 19x gross profit. These multiples represent premium territory — a characteristic the firm recognizes as historically consistent.
However, Piper Sandler observes the stock is currently valued near the 25th percentile of its multi-year historical valuation band. This represents a comparatively attractive entry level relative to its trading history.
ARK Invest maintains a $640.5 million position in SHOP, although this holding declined 18% from the previous quarter. At the conclusion of Q4 2025, 101 hedge funds monitored by Insider Monkey owned positions in the stock, representing an increase from 91 in Q3.
Cathie Wood placed SHOP in the second position on her list of top stocks for 2026.
Q4 Results and Forward Guidance
Shopify’s fourth quarter performance exceeded analyst projections. Gross merchandise value expanded 31% year-over-year. Revenue growth similarly topped 30% during the quarter.
Looking ahead to Q1, management provided guidance indicating revenue growth above 30%, sustaining positive momentum.
In response to these results, multiple investment firms — including Deutsche Bank, RBC Capital, and Cantor Fitzgerald — reduced their price objectives. Their adjustments reflected considerations around tax rate impacts and valuation multiples.
Patient Opportunity Equity Strategy emphasized B2B expansion of 98% year-over-year in Q3, accompanied by international GMV growth of 41%. The investment team also noted Shopify Campaigns, an advertising solution demonstrating a 9x surge in merchant budget allocations year-over-year.
Shopify secured Estee Lauder as a Shopify Plus client during this timeframe — marking a significant achievement for its enterprise market penetration strategy.
